Palestinian leader and Fatah chief Mahmoud Abbas has said he is ready to start peace talks with Israel even if Hamas joins the government.

"We are partners with the Israelis. They don't have the right to choose their partner. But if they are seeking a Palestinian partner, this partner exists," he said.

But Israeli acting Prime Minister Ehud Olmert, quoted by AFP news agency, said before exit polls were released that Israel could not allow Hamas in its current form to become part of the Palestinian Authority.

US President George W Bush also said Washington would not deal with members of Hamas, even if they ended up in positions of responsibility, unless the group renounced a desire to destroy Israel.

"A political party, in order to be viable, is one that professes peace, in my judgment," he said in an interview for the Wall Street Journal.

White House spokesman Scott McClellan said: "We do not deal with Hamas. Hamas is a terrorist organisation. Under current circumstances, I don't see any change in that."

The BBC's Justin Webb in Washington says that while the White House is not threatening to break off relations with the Palestinians if Hamas joins the cabinet, it is making it very clear it would prefer the group to be kept in opposition for the time being.